US ISM Services PMI Edges Higher to 51.5 in August vs. 51.1 Expected

What is the ISM Services PMI?

The Institute for Supply Management (ISM) Services Purchasing Managers' Index (PMI) is a measure of the activity level in the U.S. services sector. The index is based on a survey of over 400 purchasing managers in the services sector. The PMI is a leading indicator of economic activity, and it is closely watched by economists and investors.

Key Findings of the August ISM Services PMI

The August ISM Services PMI edged higher to 51.5, up from 51.1 in July. This reading was slightly above economists' expectations of 51.1. The PMI has now been above 50 for 28 consecutive months, indicating that the services sector is continuing to expand.

The Business Activity Index, which measures the level of activity in the services sector, rose to 53.6 in August from 52.6 in July. This is the highest reading for the Business Activity Index since January 2023.

The New Orders Index, which measures the level of new orders in the services sector, fell to 51.9 in August from 52.7 in July. This is the first decline in the New Orders Index since April 2023.

The Employment Index, which measures the level of employment in the services sector, rose to 50.2 in August from 48.9 in July. This is the highest reading for the Employment Index since March 2023.

Conclusion

The August ISM Services PMI indicates that the services sector is continuing to expand, albeit at a slightly slower pace than in recent months. The increase in the Business Activity Index and the Employment Index is encouraging, while the decline in the New Orders Index is a concern. Overall, the PMI suggests that the U.S. economy is still on a solid growth path.